MIA Audit and Assurance Practice Guide AAPG 1

AAPG 1
February 2018
(Previously
RPG 13
March 2017)
Audit and Assurance Practice Guide 1
Auditors’ report on financial statements

prepared in accordance with
the Malaysian Financial Reporting Standards
(MFRS) framework
and Companies Act 2016
AAPG 1 is previously RPG 13. No changes have been made to the

original approved text other than as mentioned below:
On 29 November 2017, Bursa Malaysia Berhad issued

amendments to the Main Market Listing Requirements and ACE
Market Listing Requirements which included amendments arising
from the codification of certain disclosure requirements pursuant to
the removal of directives dated 25 March 2010 and 20 December
2010 on disclosure requirements relating to implementation of FRS
139 and disclosure of realised and unrealised profits/losses
(“Codification of Financial Disclosures”).
With the amendments relating to the Codification of Financial

Disclosures, the reporting responsibility within the auditors’ report
on the financial statements under a separate sub-title of “Other
Reporting Responsibilities” is no longer applicable.
AAPG 1
RECOMMENDED PRACTICE GUIDE 13
Auditors’ report on financial statements prepared in accordance

with
the Malaysian Financial Reporting Standards (MFRS) framework
and Companies Act 2016
Foreword
The Malaysian Institute of Accountants has approved this Recommended Practice Guide
(RPG) for issuance to members for guidance.
This RPG shall be read in conjunction with the Preface to Malaysian Approved Standards on
Quality Control, Auditing, Review, Other Assurance and Related Services.
RPG 11 (Revised 2016), Auditors’ report on financial statements prepared in accordance with
the Malaysian Financial Reporting Standards (MFRS) framework, which was issued in
November 2016 contains illustrations of auditors’ reports on financial statements prepared in
accordance with Malaysian Financial Reporting Standards (MFRS) framework and the
requirements of the Companies Act 1965 in Malaysia arising from the new and revised auditor
reporting and related auditing standards which are effective for audits of financial statements
for periods ending on or after 15 December 2016.
On 31 January 2017, the Companies Act 2016 came into operation except for certain
provisions relating to (1) the company secretary’s registration with the Registrar of Companies
(section 241) and (2) the corporate rescue mechanisms (Division 8 of Part IIl). With the coming
into force of the Companies Act 2016, the Companies Act 1965 is repealed. The change in
the Companies Act necessitates a revision in the auditors’ report.
In general, section 266(2) of the Companies Act 2016 has retained the requirements of section
174(2) of the Companies Act 1965 except for the auditors’ duty to report in relation to the
consolidated financial statements and the accounting and other records, including registers.
This RPG contains illustrations of auditors’ reports where:
• the financial statements are for the period/year ended on or after 31 January 2017 and
are prepared in accordance with the requirements of the Companies Act 2016 in Malaysia;
• the financial statements are prepared in accordance with MFRS; and
• the auditors’ report is prepared in accordance with the new and revised auditor reporting
and related auditing standards which are effective for audits of financial statements for
periods ending on or after 15 December 2016.
MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

with the Malaysian Financial Reporting Standards (MFRS) framework and
Companies Act 2016
AAPG 1
This RPG includes the Institute’s decisions on the following areas:
1. Dual Compliance
In August and September 2016, the Institute approved for the assertion in the auditors’
report for compliance with:
(a) The International Standards on Auditing in addition to the approved standards

on auditing in Malaysia; and
(b) The International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants in addition to the By-Laws (on Professional Ethics,
Conduct and Practice) of the Institute.
The assertion of dual compliance provides clarity that an audit of a company

incorporated under the Companies Act 2016 in Malaysia is in accordance with globally
accepted standards.
This decision is applicable to the auditors’ reports in this RPG.
2. Key Audit Matters
The communication of key audit matters will be required for the audits of financial
statements of complete sets of general purpose financial statements of listed entities.
The illustrations of auditors’ report in this RPG therein include a placeholder to describe
each key audit matter and do not provide examples of key audit matters.
3. Key Audit Matters – Close Call
In some circumstances, matters relating to going concern, which include situations

where events or conditions were identified that may cast significant doubt on the
entity’s ability to continue as a going concern but no material uncertainty exists (i.e.,
“close call” situations), may be determined to be key audit matters and communicated
in the auditors’ report.
The illustrations of auditors’ report in this RPG do not provide an example of a key
audit matter relating to a close call situation.
4. Responsibilities of Directors for the Financial Statements
The auditors’ report is required to identify those responsible for the oversight of the
financial reporting process when they are different from those who fulfil the
responsibilities for the preparation of the financial statements and for assessing the
ability of the entity to continue as a going concern. For a company incorporated under
the Companies Act 2016 in Malaysia, the directors have a statutory responsibility for
the preparation of the financial statements, including the oversight of the financial
reporting process. Accordingly, no reference to oversight responsibilities is required in
the auditors’ report.

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5. Auditors’ Responsibilities for the Audit of the Financial Statements
In August 2016, the Institute resolved not to provide the option for part of the
description of the auditors’ responsibilities to be included within an appendix or on a
website of an appropriate authority. Accordingly, auditors are required to include the
description of their responsibilities within the body of the auditors’ report.

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RECOMMENDED PRACTICE GUIDE 13
AUDITORS’ REPORT ON FINANCIAL STATEMENTS PREPARED IN

ACCORDANCE WITH THE MALAYSIAN FINANCIAL REPORTING STANDARDS
(MFRS) FRAMEWORK AND COMPANIES ACT 2016
CONTENTS
Page
1. Auditors’ report on financial statements for periods ending on or after 2

15 December 2016
2. Auditors’ report on financial statements prepared in accordance with 3

MFRS
3. Restated comparative information and its effect on the auditors’ report 4-5
on financial statements prepared in accordance with MFRS for the first
time
4. Appendix: Illustrations of independent auditors’ reports on financial 6

statements

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1. AUDITORS’ REPORT ON FINANCIAL STATEMENTS FOR PERIODS

ENDING ON OR AFTER 15 DECEMBER 2016
1.1 In April and July 2015, the Malaysian Institute of Accountants adopted the following
new and revised auditor reporting and related auditing standards which are set to
enhance the communicative value of the auditors’ report as Malaysian Approved
Standards/Conforming Amendments:
(a) ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements;
(b) ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report;
(c) ISA 705 (Revised), Modifications to the Opinion in the Independent Auditor’s
Report;
(d) ISA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter
Paragraphs in the Independent Auditor’s Report;
(e) ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information;
(f) ISA 570 (Revised), Going Concern;
(g) ISA 260 (Revised), Communication with Those Charged with Governance; and
(h) Conforming Amendments to Other ISAs.
1.2 The new and revised auditor reporting and related auditing standards are effective for
audits of financial statements for periods ending on or after 15 December 2016.

with the Malaysian Financial Reporting Standards (MFRS) framework and 2
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2. AUDITORS’ REPORT ON FINANCIAL STATEMENTS PREPARED IN

ACCORDANCE WITH MFRS
2.1 The MFRS framework was issued by the Malaysian Accounting Standards Board
(MASB) in November 2011 in conjunction with its plan to converge with International
Financial Reporting Standards (IFRS) in 2012. The MFRS framework is a fully IFRS-
compliant framework.
2.2 Entities Other Than Private Entities shall apply the MFRS framework for annual periods
beginning on or after 1 January 2012, with the exception of entities subject to the
application of MFRS 141 Agriculture and/or IC Interpretation 15 Agreements for the
Construction of Real Estate (“Transitioning Entities”). The Transitioning Entities may in
alternative apply Financial Reporting Standards (FRS) and shall comply with the MFRS
framework for annual periods beginning on or after 1 January 2018. Private entities,
other than those that have applied FRS, shall apply either the Malaysian Private
Entities Reporting Standard (MPERS) in its entirety or MFRS framework in its entirety
for annual periods beginning on or after 1 January 2016. Private entities that have
applied FRS shall apply MFRS or MPERS for annual periods beginning on or after 1
January 2018.
2.3 For audit of entities that apply MPERS and comply with the requirements of the
Companies Act 2016, the auditor refers to illustrations of auditors’ reports in RPG 14,
Auditors’ report on financial statements prepared in accordance with Malaysian Private
Entities Reporting Standard (MPERS) and Companies Act 2016, which was issued in
March 2017.

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3. RESTATED COMPARATIVE INFORMATION AND ITS EFFECT ON THE

AUDITORS’ REPORT ON FINANCIAL STATEMENTS PREPARED IN
ACCORDANCE WITH MFRS FOR THE FIRST TIME
3.1 MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards requires that
for compliance with MFRS 101 Presentation of Financial Statements, an entity’s first
MFRS financial statements should include at least three statements of financial
position, two statements of profit or loss and other comprehensive income, two
separate income statements (if presented), two statements of cash flows and two
statements of changes in equity and related notes, including comparative information.
3.2 For illustration, when an entity, which has a 31 December financial year end, applies
MFRS for periods beginning on or after 1 January 2016, the entity’s first financial
statements prepared in accordance with the MFRS framework at a minimum include
the following statements:
(a) Current period (31 December 2016):
I. Statement of financial position; and

II. Statement of profit or loss and other comprehensive income, statement
of cash flows and statement of changes in equity for the year ended.
(b) Comparative information:
I. Statements of financial positions as at 31 December 2015 and 1 January

2015 (opening statement of financial position prepared in accordance
with MFRS); and
II. Statement of profit or loss and other comprehensive income, statement
of cash flows and statement of changes in equity for the year ended 31
December 2015.
3.3 The Companies Act 2016 requires an auditor of a company to report to the members
on the financial statements. Accordingly, there is no statutory requirement for the
auditor to audit and report on the restated comparative information. Ordinarily, the
financial statements that were published before the financial statements prepared in
accordance with the MFRS framework for the first time were audited and the audit
opinions given by the auditor on those financial statements would not have been
prepared based on the MFRS framework. Unless the auditor is separately engaged to
report on the restated comparative information in the financial statements prepared in
accordance with the MFRS framework, the auditor would not have expressed an audit
opinion on the restated comparative information. The comparative information, hence,
is unaudited. ISA 710, Comparative Information – Corresponding Figures and
Comparative Financial Statements requires the auditor to state in an ‘Other Matter’
paragraph that the comparative information is unaudited.
3.4 However, such a statement does not relieve the auditor of the requirement to obtain
sufficient appropriate audit evidence that the opening balances and comparative
information do not contain misstatements that materially affect the current period’s
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financial statements. It is very unlikely that the auditor can obtain sufficient appropriate
audit evidence regarding the current period’s financial statements if the auditor has not
also obtained sufficient appropriate audit evidence on the opening statement of
financial position and the MFRS 1 transition adjustments in accordance with ISA 510,
Initial Audit Engagements – Opening Balances. Accordingly, the auditors’
responsibilities in respect of the work done on the opening balances as part of the audit
of the current financial statements may be included in an ‘Other Matter’ paragraph to
assist users’ understanding of the auditors’ responsibilities relating to the restated
comparative information.
3.5 The auditor refers to Illustration 3 when reporting on financial statements prepared in
accordance with the MFRS framework for the first time.

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4.0 APPENDIX: ILLUSTRATIONS OF INDEPENDENT AUDITORS’ REPORTS

ON FINANCIAL STATEMENTS
Page
Reports with unmodified opinion

Illustration 1: Financial statements prepared in accordance 7 - 10
with the MFRS framework for companies with
no subsidiaries
Illustration 2: Financial statements prepared in accordance 11 - 14

with the MFRS framework for companies with
subsidiaries
Illustration 3: Financial statements prepared in accordance 15 -16

with the MFRS framework for the first time
Reports with modifications to the opinion

Illustration 4: Qualified opinion due to a material 17 - 19
misstatement of the financial statements
Illustration 5: Qualified opinion due to inability to obtain 20 - 22

sufficient appropriate audit evidence
Illustration 6: Adverse opinion due to a disagreement with 23 - 25

directors on provision for foreseeable losses
Illustration 7: Disclaimer of opinion due to inability to obtain 26 - 27

sufficient appropriate audit evidence about
multiple elements of the financial statements
Report relating to going concern

Illustration 8: Going concern – unmodified opinion when a 28 - 29
material uncertainty exists and disclosure in
the financial statements is adequate
Report that include an emphasis of matter paragraph

Illustration 9: Unmodified opinion with emphasis of matter 30 - 31
paragraph
Other Illustrations of the Information Other than the Financial 32 - 33

Statements and Auditors’ Report Thereon section
Notes to the illustrations 34 - 35

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Illustration 1: Financial statements prepared in accordance with the MFRS framework for
companies with no subsidiaries
For purposes of this illustration, the following circumstances are assumed:

• The audit is not a group audit (i.e., ISA 600, Special Considerations-Audits of Group
Financial Statements (Including the Work of Component Auditors) does not apply).
• Key audit matters have been communicated in accordance with ISA 701.
• The auditor has obtained all of the other information prior to the date of the auditors’
report.
INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF XYZ BERHAD
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of XYZ Berhad, which comprise the statement of
financial position as at 31 December 20XX, and the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, as set out on pages XX to XX.
In our opinion, the accompanying financial statements give a true and fair view of the financial
position of the Company as at 31 December 20XX, and of its financial performance and its
cash flows for the year then ended in accordance with [Malaysian Financial Reporting
Standards, International Financial Reporting Standards] 1 and the requirements of the
Companies Act 2016 in Malaysia.
Basis for Opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and
International Standards on Auditing (Ref: Note (a)). Our responsibilities under those standards
are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements
section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence and Other Ethical Responsibilities
We are independent of the Company in accordance with the By-Laws (on Professional Ethics,
Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (“IESBA Code”) (Ref: Note (a)), and we have fulfilled our other ethical
responsibilities in accordance with the By-Laws and the IESBA Code.
Key Audit Matters (Ref: Note (b))
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the Company for the current year. These
matters were addressed in the context of our audit of the financial statements of the Company
1 When the applicable financial reporting framework is Financial Reporting Standards, the words should be
changed accordingly to refer to the financial reporting framework.
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as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
[Description of each key audit matter in accordance with ISA 701.]
Information Other than the Financial Statements and Auditors’ Report Thereon
The directors of the Company are responsible for the other information. The other information
comprises the [information included in the annual report],2 but does not include the financial
statements of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Company does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Company, our responsibility is
to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements of the Company or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. [We have nothing to report in this
regard.]/[As described below, we have concluded that such a material misstatement of the
other information exists.
Description of material misstatement of the other information.]
Responsibilities of the Directors for the Financial Statements (Ref: Note (c))
The directors of the Company are responsible for the preparation of financial statements of
the Company that give a true and fair view in accordance with [Malaysian Financial Reporting
Standards, International Financial Reporting Standards]1 and the requirements of the
Companies Act 2016 in Malaysia. The directors are also responsible for such internal control
as the directors determine is necessary to enable the preparation of financial statements of
the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Company, the directors are responsible for
assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ Responsibilities for the Audit of the Financial Statements (Ref: Note (d))
Our objectives are to obtain reasonable assurance about whether the financial statements of
the Company as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with approved
standards on auditing in Malaysia and International Standards on Auditing will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
2 A more specific description of the other information, such as “Chairman’s Statement and Directors’ Report," may
be used to identify the other information.
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As part of an audit in accordance with approved standards on auditing in Malaysia and

International Standards on Auditing, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements of the
Company, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the
financial statements of the Company or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditors’ report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements of
the Company, including the disclosures, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.3
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial statements of the Company for the current year
and are therefore the key audit matters. We describe these matters in our auditors’ report
unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.4
3 Applicable to audits of financial statements of listed entities (Ref: Para. 40(b) of ISA 700 (Revised)).
4 Applicable to audits of financial statements of listed entities and any other entities for which key audit matters are
communicated in accordance ISA 701 (Ref: Para. 40(c) of ISA 700 (Revised)).
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Other Matters
This report is made solely to the members of the Company, as a body, in accordance with
Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not
assume responsibility to any other person for the content of this report.
[Audit Firm] [Partner] (Ref: Note (e))

[AF XXXX] [99999/99/9999 (J)]
Chartered Accountants Chartered Accountant
[Date]
[Location in the country]5
5 The auditors’ report shall name the location in the jurisdiction where the auditor practices (Ref: Para. 48 of ISA
700 (Revised)).
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companies with subsidiaries

• The audit is a group audit (i.e., ISA 600 applies).
report.

Opinion
We have audited the financial statements of XYZ Berhad, which comprise the statements of
financial position as at 31 December 20XX of the Group and of the Company, and the
statements of profit or loss and other comprehensive income, statements of changes in equity
and statements of cash flows of the Group and of the Company for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, as
set out on pages XX to XX.
In our opinion, the accompanying financial statements give a true and fair view of the financial
position of the Group and of the Company as at 31 December 20XX, and of their financial
performance and their cash flows for the year then ended in accordance with [Malaysian
Financial Reporting Standards, International Financial Reporting Standards] 1 and the
requirements of the Companies Act 2016 in Malaysia.
Basis for Opinion
appropriate to provide a basis for our opinion.
We are independent of the Group and of the Company in accordance with the By-Laws (on
Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-
Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (“IESBA Code”) (Ref: Note (a)), and we have fulfilled our other
ethical responsibilities in accordance with the By-Laws and the IESBA Code.
significance in our audit of the financial statements of the Group and of the Company for the
current year. These matters were addressed in the context of our audit of the financial
1 When the applicable financial reporting framework is Financial Reporting Standards, the words should be changed
accordingly to refer to the financial reporting framework.
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statements of the Group and of the Company as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the
other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our
responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements of the Group and of the
Company or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
of this other information, we are required to report that fact. [We have nothing to report in this
regard.]/[As described below, we have concluded that such a material misstatement of the
other information exists.
Description of material misstatement of the other information.]
The directors of the Company are responsible for the preparation of financial statements of
the Group and of the Company that give a true and fair view in accordance with [Malaysian
Financial Reporting Standards, International Financial Reporting Standards]1 and the
requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for
such internal control as the directors determine is necessary to enable the preparation of
financial statements of the Group and of the Company that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the directors are
responsible for assessing the Group’s and the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements of
the Group and of the Company as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with approved standards on auditing in Malaysia and International Standards on
Auditing will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
2 A more specific description of the other information, such as “Chairman’s Statement and Directors’ Report,” may
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reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and
International Standards on Auditing, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements of the
Group and of the Company, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s and the Company’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s or
the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related
disclosures in the financial statements of the Group and of the Company or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditors’ report. However, future events or
conditions may cause the Group or the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the financial statements of
the Group and of the Company, including the disclosures, and whether the financial
statements of the Group and of the Company represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
statements of the Group. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and

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other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.3
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial statements of the Group and of the Company for
the current year and are therefore the key audit matters. We describe these matters in our
auditors’ report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.4
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that
the subsidiaries of which we have not acted as auditors, are disclosed in note GG5 to the
financial statements.6
Other Matters
[See illustration 1.]

[AF XXXX] [99999/99/9999 (J)]
[Date]
3
Applicable to audits of financial statements of listed entities (Ref: Para. 40(b) of ISA 700 (Revised)).
4
Applicable to audits of financial statements of listed entities and any other entities for which key audit matters are
communicated in accordance ISA 701 (Ref: Para. 40(c) of ISA 700 (Revised)).
5
The auditor may also choose to list all the subsidiaries not audited by him in the audit report.
6 Applicable to companies with subsidiaries – not all of which are audited by the reporting firm.
700 (Revised)).
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the first time

report.

Opinion
Basis for Opinion
Other Matters
1. As stated in Note BB to the financial statements, XYZ Berhad adopted Malaysian
Financial Reporting Standards on 1 January 20XX with a transition date of 1 January
20XX-1. These standards were applied retrospectively by the directors to the
comparative information in these financial statements, including the statements of
financial position of the Group and of the Company as at 31 December 20XX-1 and 1
January 20XX-1, and the statements of profit or loss and other comprehensive income,
statements of changes in equity and statements of cash flows of the Group and of the
Company for the year ended 31 December 20XX-1 and related disclosures. We were
not engaged to report on the restated comparative information and it is unaudited. Our
responsibilities as part of our audit of the financial statements of the Group and of the
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Company for the year ended 31 December 20XX, in these circumstances, included
obtaining sufficient appropriate audit evidence that the opening balances as at 1 January
20XX do not contain misstatements that materially affect the financial position as at 31
December 20XX and the financial performance and cash flows for the year then ended.
2. This report is made solely to the members of the Company, as a body, in accordance
with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We
do not assume responsibility to any other person for the content of this report.

[AF XXXX] [99999/99/9999 (J)]
[Date]
700 (Revised)).
Companies Act 2016
AAPG 1
Illustration 4: Qualified opinion due to a material misstatement of the financial statements

• The audit is not a group audit (i.e., ISA 600 does not apply).
• Inventories are misstated. The misstatement is deemed to be material but not pervasive
to the financial statements (i.e., a qualified opinion is appropriate).
report and the matter giving rise to the qualified opinion on the financial statements also
affects the other information.

Qualified Opinion
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying financial statements give a true and fair view of the
financial position of the Company as at 31 December 20XX, and of its financial performance
and its cash flows for the year then ended in accordance with [Malaysian Financial Reporting
Standards, International Financial Reporting Standards] 1 and the requirements of the
Companies Act 2016 in Malaysia.
Basis for Qualified Opinion
The Company’s inventories are carried in the statement of financial position at RMXXX at 31
December 20XX. The directors have not stated the inventories at the lower of cost and net
realisable value but has stated them solely at cost, which constitutes a departure from
Malaysian Financial Reporting Standards. The Company’s records indicate that, had the
directors stated the inventories at the lower of cost and net realisable value, an amount of
RMXXX would have been required to write the inventories down to their net realisable value.
Accordingly, cost of sales would have been increased by RMXXX and income tax, net income
and shareholders’ equity would have been reduced by RMXXX, RMXXX and RMXXX,
respectively.
appropriate to provide a basis for our qualified opinion.
Companies Act 2016
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of this other information, we are required to report that fact. As described in the Basis for
Qualified Opinion section above, the directors have not stated the inventories at the lower of
cost and net realisable value but has stated them solely at cost, which constitutes a departure
from Malaysian Financial Reporting Standards. We have concluded that the other information
is materially misstated for the same reason with respect to the amounts or other items in the
[annual report]2 affected by the failure to state the inventories at the lower of cost and net
realisable value.
these matters. In addition to the matter described in the Basis for Qualified Opinion section,
we have determined the matters described below to be the key audit matters to be
communicated in our report.
in our opinion, the accounting and other records for the matter as described in the Basis for
Qualified Opinion section have not been properly kept by the Company in accordance with the
provision of the Act.3
2
A more specific description of the other information, such as “Chairman’s Statement and Directors’ Report," may
3 In accordance with section 266(3) of the Companies Act 2016, the auditor shall state in his report the particulars
of any deficiency, failure or shortcoming in respect of any matter referred to in this subsection.
Companies Act 2016
AAPG 1
Other Matters

[AF XXXX] [99999/99/9999 (J)]
[Date]
700 (Revised)).
Companies Act 2016
AAPG 1
Illustration 5: Qualified opinion due to inability to obtain sufficient appropriate audit evidence

• Investment in associates are accounted for in the financial statements of the Group using
the equity method.
• The auditor was unable to obtain sufficient appropriate audit evidence regarding an
investment in a foreign associate. The possible effects of the inability to obtain sufficient
appropriate audit evidence are deemed to be material but not pervasive to the financial
statements of the Group and of the Company (i.e., a qualified opinion is appropriate).
report and the matter giving rise to the qualified opinion on the financial statements also

Qualified Opinion
We have audited the financial statements of XYZ Berhad, which comprise the statements of
financial position as at 31 December 20XX of the Group and of the Company, and the
statements of profit or loss and other comprehensive income, statements of changes in equity
and statements of cash flows of the Group and of the Company for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, as
set out on pages XX to XX.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified
Opinion section of our report, the accompanying financial statements give a true and fair view
of the financial position of the Group and of the Company as at 31 December 20XX, and of
their financial performance and their cash flows for the year then ended in accordance with
[Malaysian Financial Reporting Standards, International Financial Reporting Standards]1 and
the requirements of the Companies Act 2016 in Malaysia.
Basis for Qualified Opinion
The Company’s investment in ABC Pte. Ltd., a foreign associate acquired during the year
and accounted for by the equity method, is carried at RMXXX on the statement of financial
position as at 31 December 20XX, and XYZ Berhad’s share of ABC Pte. Ltd.’s net income of
RMXXX is included in XYZ Berhad’s income for the year then ended. We were unable to
obtain sufficient appropriate audit evidence about the carrying amount of XYZ Berhad’s
investment in ABC Pte. Ltd. as at 31 December 20XX and XYZ Berhad’s share of ABC Pte.
Ltd.’s net income for the year because we were denied access to the financial information,
management, and the auditors of ABC Pte. Ltd.. Consequently, we were unable to determine
whether any adjustments to these amounts were necessary.
Companies Act 2016
AAPG 1
appropriate to provide a basis for our qualified opinion.
statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the
other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our
information is materially inconsistent with the financial statements of the Group and of the
Company or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
Qualified Opinion section above, we were unable to obtain sufficient appropriate audit
evidence about the carrying amount of XYZ Berhad’s investment in ABC Pte. Ltd. as at 31
December 20XX and XYZ Berhad’s share of ABC Pte. Ltd.’s net income for the year.
Accordingly, we are unable to conclude whether or not the other information is materially
misstated with respect to this matter.
significance in our audit of the financial statements of the Group and of the Company for the
current year. These matters were addressed in the context of our audit of the financial
statements of the Group and of the Company as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. In addition to the matter described
in the Basis for Qualified Opinion section, we have determined the matters described below
to be the key audit matters to be communicated in our report.
2 A more specific description of the other information, such as “Chairman’s Statement and Directors’ Report,” may
Companies Act 2016
AAPG 1

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that:
(a) the subsidiaries of which we have not acted as auditors, are disclosed in note GG3 to
the financial statements.4
(b) in our opinion, we have not obtained all the information and explanations that we
required.
Other Matters

[AF XXXX] [99999/99/9999 (J)]
[Date]
3
The auditor may also choose to list all the subsidiaries not audited by him in the audit report.
4 Applicable to companies with subsidiaries – not all of which are audited by the reporting firm.
700 (Revised)).
Companies Act 2016
AAPG 1
Illustration 6: Adverse opinion due to a disagreement with directors on provision for

foreseeable losses

• There was no provision made for foreseeable losses expected to arise on certain
significant long-term contracts in progress. The misstatement is deemed to be material
and pervasive to the financial statements (i.e., an adverse opinion is appropriate).
• ISA 701 applies; however, the auditor has determined that there are no key audit matters
other than the matter described in the Basis for Adverse Opinion section.
report and the matter giving rise to the adverse opinion on the financial statements also

Adverse Opinion
In our opinion, because of the significance of the matter described in the Basis for Adverse
Opinion section of our report, the accompanying financial statements do not give a true and
fair view of the financial position of the Company as at 31 December 20XX, and of its financial
performance and its cash flows for the year then ended in accordance with [Malaysian
Financial Reporting Standards, International Financial Reporting Standards] 1 and the
requirements of the Companies Act 2016 in Malaysia.
Basis for Adverse Opinion
As explained in Note GG to the financial statements, no provision has been made for losses
expected to arise on certain significant long-term contracts currently in progress, as the
directors consider that such losses should be off-set against amounts recoverable on other
long-term contracts. Provision for foreseeable losses on individual contracts is required by
MFRS 111 Construction Contracts of Malaysian Financial Reporting Standards. Had such
losses been provided for, the effects would have been to reduce profit before tax for the year
and the contract work in progress by RMXXX, income taxes for the year by RMXXX and net
profit for the year by RMXXX. Accordingly, retained earnings as at 31 December 20XX would
also have been reduced by RMXXX.
Companies Act 2016
AAPG 1
appropriate to provide a basis for our adverse opinion.
Adverse Opinion section above, the Company should have made provision for losses
expected to arise on certain significant long-term contracts currently in progress. We have
concluded that the other information is materially misstated for the same reason with respect
to the amounts or other items in the [annual report]2 affected by not making provision for losses
expected to arise on certain significant long-term contracts currently in progress.
Except for the matter described in the Basis for Adverse Opinion section, we have determined
that there are no other key audit matters to communicate in our report.
in our opinion, the accounting and other records for the matter as described in the Basis for
Adverse Opinion section have not been properly kept by the Company in accordance with the
provision of the Act.3
Other Matters
2
A more specific description of the other information, such as “Chairman’s Statement and Directors’ Report," may
3 In accordance with section 266(3) of the Companies Act 2016, the auditor shall state in his report the particulars
Companies Act 2016
AAPG 1

[AF XXXX] [99999/99/9999 (J)]
[Date]
700 (Revised)).
Companies Act 2016
AAPG 1
Illustration 7: Disclaimer of opinion due to inability to obtain sufficient appropriate audit

evidence about multiple elements of the financial statements

• The auditor was unable to obtain sufficient appropriate audit evidence about multiple
elements of the financial statements, that is, the auditor was also unable to obtain audit
evidence about the company’s inventories and accounts receivables. The possible
effects of this inability to obtain sufficient appropriate audit evidence are deemed to be
both material and pervasive to the financial statements.
Note: Unless required by law or regulation, when the auditor disclaims an opinion on the
financial statements, the auditors’ report shall not include a Key Audit Matters section in
accordance with ISA 701 or an Other Information section in accordance with ISA 720
(Revised)(Ref: Para. 29 of ISA 705 (Revised)).

Disclaimer of Opinion
We were engaged to audit the financial statements of XYZ Berhad, which comprise the
statement of financial position as at 31 December 20XX, and the statement of profit or loss
and other comprehensive income, statement of changes in equity and statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, as set out on pages XX to XX.
We do not express an opinion on the accompanying financial statements of the Company.
Because of the significance of the matters described in the Basis for Disclaimer of Opinion
section of our report, we have not been able to obtain sufficient appropriate audit evidence to
provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion
We were not appointed as auditors of the Company until after 31 December 20XX and thus
did not observe the counting of physical inventories at the beginning and end of the year. We
were unable to satisfy ourselves by alternative means concerning the inventory quantities held
at 31 December 20XX-1 and 20XX, which are stated in the statements of financial position at
RMXXX and RMXXX, respectively. In addition, the introduction of a new computerised
accounts receivable system in September 20XX resulted in numerous errors in accounts
receivable. As of the date of our report, the directors were still in the process of rectifying the
system deficiencies and correcting the errors. We were unable to confirm or verify by
alternative means accounts receivable included in the statement of financial position
amounting to RMXXX as at 31 December 20XX. As a result of these matters, we were unable
to determine whether any adjustments might have been found necessary in respect of
recorded or unrecorded inventories and accounts receivable, and the elements making up the
statement of profit or loss and other comprehensive income, statement of changes in equity
and statement of cash flows.

Companies Act 2016
AAPG 1
Our responsibility is to conduct an audit of the Company’s financial statements in accordance
with approved standards on auditing in Malaysia and International Standards on Auditing (Ref:
Note (a)), and to issue an auditors’ report. However, because of the matters described in the
Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient
appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
in our opinion:
(a) the accounting and other records for the matter as described in the Basis for Disclaimer
of Opinion section have not been properly kept by the Company in accordance with
the provision of the Act.1
(b) we have not obtained all the information and explanations that we required.
Other Matters

[AF XXXX] [99999/99/9999 (J)]
[Date]
1
In accordance with section 266(3) of the Companies Act 2016, the auditor shall state in his report the particulars
700 (Revised)).
Companies Act 2016
AAPG 1
Illustration 8: Going concern - unmodified opinion when a material uncertainty exists and
disclosure in the financial statements is adequate

• The audit is not a group audit (i.e., ISA 600 does not apply)
• The auditor has concluded an unmodified (i.e., “clean”) opinion is appropriate based on
the audit evidence obtained.
• Based on the audit evidence obtained, the auditor has concluded that a material
uncertainty exists related to events or conditions that may cast significant doubt on the
company’s ability to continue as a going concern. The disclosure of the material
uncertainty in the financial statements is adequate.
report.

Opinion
Basis for Opinion
Material Uncertainty Related to Going Concern
We draw attention to Note GG in the financial statements, which indicates that the Company
incurred a net loss of RMXXX during the year ended 31 December 20XX and, as of that date,
the Company’s current liabilities exceeded its current assets by RMXXX. As stated in Note
GG, these events or conditions, along with other matters as set forth in Note GG, indicate that
a material uncertainty exists that may cast significant doubt on the Company’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
these matters. In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined the matters described below to be the key audit matters
to be communicated in our report.

Companies Act 2016
AAPG 1
Other Matters

[AF XXXX] [99999/99/9999 (J)]
[Date]
700 (Revised)).
Companies Act 2016
AAPG 1
Illustration 9: Unmodified opinion with emphasis of matter paragraph

• The auditor has concluded an unmodified (i.e., “clean”) opinion is appropriate based on
the audit evidence obtained.
• Between the date of the financial statements and the date of the auditors’ report, there
was a fire in the Company’s production facilities, which was disclosed by the Company
as a subsequent event. In the auditors’ judgement, the matter is of such importance that
it is fundamental to users’ understanding of the financial statements. The matter did not
require significant auditor attention in the audit of the financial statements in the current
year.
report
• The directors had disclosed in the Directors’ Report that there was a fire in the
Company’s production facilities between the date of the financial statements and the
date of the auditors’ report, in accordance with the requirement of paragraph 1(o) of the
Fifth Schedule of the Companies Act 2016.

Opinion
Basis for Opinion
Emphasis of Matter1
We draw attention to Note X of the financial statements, which describes the effects of a fire
in the Company’s production facilities. Our opinion is not modified in respect of this matter.
1 An Emphasis of Matter paragraph may be presented either directly before or after the Key Audit Matters section
based on the auditor’s judgement as to the relative significance of the information included in the Emphasis of
Matter paragraph (Ref: Para. A16 of ISA 706).
Companies Act 2016
AAPG 1
Other Matters

[AF XXXX] [99999/99/9999 (J)]
[Date]
700 (Revised)).

Companies Act 2016
AAPG 1
Other Illustrations of the Information Other than the Financial Statements and Auditors’
Report Thereon section
ill1. Auditors’ report of a listed entity containing an unmodified opinion when the
auditor has obtained part of the other information prior to the date of the auditors’
report, has not identified a material misstatement of the other information, and
expects to obtain other information after the date of the auditors’ report
The directors of the Company are responsible for the other information. The other
information comprises the [X report] (but does not include the financial statements of the
Company and our auditors’ report thereon), which we obtained prior to the date of this
auditors’ report, and the [Y report], which is expected to be made available to us after
that date.
Our opinion on the financial statements of the Company does not cover the other
information and we do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Company, our
responsibility is to read the other information identified above and, in doing so, consider
whether the other information is materially inconsistent with the financial statements of
the Company or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed on the other information that we obtained prior
to the date of this auditors’ report, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in
this regard.
[When we read the Y report, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the directors of the Company and
[describe applicable actions].] 1
ill2. Auditors’ report of an entity other than a listed entity containing an unmodified
opinion when the auditor has obtained part of the other information prior to the
date of the auditors’ report, has not identified a material misstatement of the other
information, and expects to obtain other information after the date of the auditors’
report
The directors of the Company are responsible for the other information. The other
information obtained at the date of this auditors’ report is [information included in the X
report], but does not include the financial statements of the Company and our auditors’
report thereon.
Our opinion on the financial statements of the Company does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Company, our
1 This additional paragraph may be useful when the auditor has identified an uncorrected material misstatement of
the other information obtained after the date of the auditors’ report and has a legal obligation to take specific
action in response.
MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance with
the Malaysian Financial Reporting Standards (MFRS) framework and Companies 32
Act 2016
AAPG 1
information is materially inconsistent with the financial statements of the Company or

our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the
date of this auditors’ report, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this
regard.

Act 2016
AAPG 1
Notes to the illustrations

Dual Compliance
(a) ISA 700 (Revised) contains requirements when an auditor is required to conduct an audit
in accordance with the auditing standards of a specific jurisdiction but may additionally
have complied with the International Standards on Auditing as issued by the
International Auditing and Assurance Standards Board (IAASB) in the conduct of the
audit.
In August and September 2016, the Institute approved for the assertion in the auditors’
report for compliance with:
(a) The International Standards on Auditing in addition to the approved standards on
auditing in Malaysia; and
(b) The IESBA Code in addition to the By-Laws (on Professional Ethics, Conduct and
Practice) of the Institute.
The assertion of dual compliance provides clarity that an audit of a company
incorporated under the Companies Act 2016 in Malaysia is in accordance with globally
accepted standards.
Key Audit Matters
(b) ISA 701 applies to audits of complete sets of general purpose financial statements of
listed entities and circumstances when the auditor otherwise decides to communicate
key audit matters in the auditors’ report. ISA 701 also applies when the auditor is
required by law or regulation to communicate key audit matters in the auditors’ report.
Glossary of Terms defines “listed entity” as follows:
Listed entity – An entity whose shares, stock or debt are quoted or listed on a recognised
stock exchange, or are marketed under the regulations of a recognised stock exchange
or other equivalent body.
Responsibilities of the Directors for the Financial Statements
(c) ISA 700 (Revised) requires the auditor to identify those responsible for the oversight of
the financial reporting process in this section of the auditors’ report, when they are
different from those who fulfil the responsibilities for the preparation of the financial
statements and for assessing the ability of the Company/Group to continue as a going
concern.
For a company incorporated under the Companies Act 2016 in Malaysia, the directors
have a statutory responsibility for the preparation of the financial statements, including
the oversight of the financial reporting process. Accordingly, no reference to oversight
responsibilities is required in the auditors’ report.
Auditors’ Responsibilities for the Audit of the Financial Statements
(d) ISA 700 (Revised) requires the description of the auditors’ responsibilities to be included
in one of the following ways:
(a) Within the body of the auditors’ report;

Act 2016
AAPG 1
(b) In an appendix to the auditors’ report, in which case the auditors’ report shall
include a reference to the location of the appendix; or
(c) By a specific reference within the auditors’ report to the location of such a
description on a website of an appropriate authority, where law, regulation or
national auditing standards expressly permit the auditor to do so.
In August 2016, the Institute resolved not to provide the option allowed under ISA 700
(Revised) for part of the description of the auditors’ responsibilities to be included within
an appendix or on a website of an appropriate authority.
Accordingly, auditors are required to include the description of their responsibilities within the
body of the auditors’ report.
Partner
(e) ISA 700 (Revised) requires that the name of the engagement partner to be included in
the auditors’ report for audits of complete sets of general purpose financial statements
of listed entities. Although ISA 700 (Revised) does not specify the manner in which this
inclusion should be made in the auditors’ report, the illustrative reports contained in the
appendix to ISA 700 (Revised) suggested the following: “The engagement partner on
the audit resulting in this independent auditor’s report is [name]”.
The auditor is required, in accordance with section 265(5) of the Companies Act 2016,
to sign the auditors’ report in the name of the firm and in his own name as a partner of
the firm who is an approved company auditor and to include the firm number and the
approval number of the partner either under or alongside the signature of the firm and
the partner respectively.
Auditors are not precluded from including the illustrative wording suggested in the
illustrative reports contained in the appendix to ISA 700 (Revised) in their auditors’
report, in addition to the signing convention contained in this RPG.

Act 2016
Dewan Akauntan, Unit 33-01, Level 33, Tower A, The Vertical, Avenue 3
Bangsar South City, No.8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia
[phone] +603 2722 9000 [fax] +603 2722 9100
[web] www.mia.org.my [email] technical@mia.org.my

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AAPG 1

Audit and Assurance Practice Guide 1

Auditors’ report on financial statements

AAPG 1 is previously RPG 13. No changes have been made to the

On 29 November 2017, Bursa Malaysia Berhad issued

With the amendments relating to the Codification of Financial

RECOMMENDED PRACTICE GUIDE 13

Auditors’ report on financial statements prepared in accordance

This RPG contains illustrations of auditors’ reports where:

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

This RPG includes the Institute’s decisions on the following areas:

(a) The International Standards on Auditing in addition to the approved standards

The assertion of dual compliance provides clarity that an audit of a company

This decision is applicable to the auditors’ reports in this RPG.

2. Key Audit Matters

3. Key Audit Matters – Close Call

In some circumstances, matters relating to going concern, which include situations

4. Responsibilities of Directors for the Financial Statements

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

5. Auditors’ Responsibilities for the Audit of the Financial Statements

This decision is applicable to the auditors’ reports in this RPG.

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

RECOMMENDED PRACTICE GUIDE 13

AUDITORS’ REPORT ON FINANCIAL STATEMENTS PREPARED IN

1. Auditors’ report on financial statements for periods ending on or after 2

2. Auditors’ report on financial statements prepared in accordance with 3

4. Appendix: Illustrations of independent auditors’ reports on financial 6

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

1. AUDITORS’ REPORT ON FINANCIAL STATEMENTS FOR PERIODS

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

2. AUDITORS’ REPORT ON FINANCIAL STATEMENTS PREPARED IN

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

3. RESTATED COMPARATIVE INFORMATION AND ITS EFFECT ON THE

(a) Current period (31 December 2016):

I. Statement of financial position; and

(b) Comparative information:

I. Statements of financial positions as at 31 December 2015 and 1 January

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

4.0 APPENDIX: ILLUSTRATIONS OF INDEPENDENT AUDITORS’ REPORTS

Reports with unmodified opinion

Illustration 2: Financial statements prepared in accordance 11 - 14

Illustration 3: Financial statements prepared in accordance 15 -16

Reports with modifications to the opinion

Illustration 5: Qualified opinion due to inability to obtain 20 - 22

Illustration 6: Adverse opinion due to a disagreement with 23 - 25

Illustration 7: Disclaimer of opinion due to inability to obtain 26 - 27

Report relating to going concern

Report that include an emphasis of matter paragraph

Other Illustrations of the Information Other than the Financial 32 - 33

Notes to the illustrations 34 - 35

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

For purposes of this illustration, the following circumstances are assumed:

INDEPENDENT AUDITORS’ REPORT

As part of an audit in accordance with approved standards on auditing in Malaysia and

[Audit Firm] [Partner] (Ref: Note (e))

For purposes of this illustration, the following circumstances are assumed:

INDEPENDENT AUDITORS’ REPORT

MIA: AAPG 1 Auditors’ report on financial statements prepared in accordance

[Audit Firm] [Partner] (Ref: Note (e))

For purposes of this illustration, the following circumstances are assumed:

INDEPENDENT AUDITORS’ REPORT

[Audit Firm] [Partner] (Ref: Note (e))

Illustration 4: Qualified opinion due to a material misstatement of the financial statements